News

First defamation costs capping order

Associated Newspapers has succeeded in their application for a costs-capping Order in an action brought by a claimant acting with a conditional fee agreement (CFA).

Alberta Matadeen, the Claimant in the libel action does not have ‘after-the-event’ insurance (ATE) and the application was made after the ground-breaking decision of the Court of Appeal in Musa King v Telegraph Group Ltd [2004] EMLR 429. In that case, Brooke LJ had said that where defamation proceedings were brought under a CFA with no ATE the Master should make an order analogous to an order under s 65(1) of the Arbitration Act 1966 limiting the recoverable costs of the Claimant.

The effect of the order made by Master Eyre today is that the case will be referred to a costs judge who will decide the maximum level of costs (including any success fee) that the Claimant can recover from the Defendants if she is successful at trial. The Master adjourned further directions to trial pending the setting of the cap.

In a short judgment, the Master said the circumstances relied on by the Defendant – which included the fact that the Claimant was on a CFA with no ATE, the size of her costs bill, which was likely to be hugely disproportionate to the level of recoverable damages, the disproportionate level of risk as between the Claimant and the Defendant, and the absence of any demonstrable means to meet the Defendants’ costs – made this precisely the kind of case in which such an order was appropriate. This is believed to be the first order of its kind in a defamation case.